As our readers know, individuals may obtain two main types of licenses from the Department of Real Estate (DRE): a broker license and a salesperson license. However, according to a recent survey of our readers, the public tends to favor the term “real estate agent” over “salesperson.”
This result presents two further questions. First, why is the term “salesperson” preferred by the DRE and subsequently found in many real estate-related writings? And second, what explains the overwhelming preference for the term “agent”?
Before getting into it, let’s address the elephant in the room. Swaths of the public likely default to the term “Realtor” rather than either “salesperson” or “agent.” But while all Realtors are real estate agents, NOT all real estate agents are Realtors. Realtors are members of the National Association of Realtors® (NAR) and its state wing, the California Association of Realtors® (CAR). A “Realtor” designation only denotes membership in the trade union, and thus is not an appropriate blanket term for a profession with issues and interests far outside those of NAR and CAR.
An agent of the agent
The reason many publications favor the term “salesperson” is a technical one. Under California law, the agent of a client in a sales transaction is actually the broker, not an agent employed by the broker. The agent only acts as a representative of the broker — thus making them an agent of the agent. [Calif. Business and Professions Code §10160]
Only when acting as a representative — an agent — of their broker may the real estate agent perform brokerage services. Only a broker is authorized to independently contract for and provide services to clients. [Grand v. Griesinger (1958) 160 CA2d 397]
Because of this potentially confusing snag, it is helpful to create a distinction between an “agent” under the law — i.e. the broker — and an “agent” in common parlance — i.e. the broker’s employed licensee.
The term “salesperson,” while not an especially good term, loosely fits because a large chunk of licensed agents who are not brokers are engaged in the business of buying and selling residential and commercial properties. Notably, however, not all of them are.
The reason “real estate agent” seems to be the preferred term is partly because of the variety of occupations a licensee may hold without primarily being a salesperson. The dearth of licensees who operate in the business of mortgage loan origination or property management, along with plenty of other fields for which a real estate license is necessary, prove that sales is just a small part of what these agents do.
Agent as identity
Why is this important?
At heart, the question is really one of identity. Real estate agents don’t just sell homes — in fact, licensees don’t sell homes at all, but rather broker transactions between buyers and sellers.
Licensees represent their clients, walking them through the often stressful process of buying or selling a home using a foundation of knowledge and experience. It’s this, as much as the ability to sell, that makes real estate agents a valuable and enduring part of the real estate industry.